ice cream factory final report

ICE CREAM FACTORY

Institute Of Business Management

ICE CREAM FACTORY

“MILKY DELIGHTS”

ICE CREAM FACTORY


GROUP MEMBERS

Sidra Ahmed 7877

Mohammad Ahsan 7710

Amit 7233

Ramzan 7131

SUBMITTED TO

Sir Mohammad Ali Sheikh

ICE CREAM FACTORY


TABLE OF CONTENTS

LETTER OF ACKNOWLEDGEMENT 5

MANAGEMENT 6

SPONSORS 6

MARKET APPRAISAL 7

OVERVIEW OF LOCAL INDUSTRY 7

MARKET SIZE 9

DEMAND FOR ICE CREAM 9

DEMAND AND SUPPLY GAP 9

MARKET SEGMENT 11

TECHNICAL APPRAISAL 12

MANUFACTURING PROCESSES 12

HARDENING 15

RAW MATERIALS USED 16

SIZE OF THE FACTORY 17

EQUIPMENTS 18

LAYOUT OF THE FACTORY 20

FINANCIAL ANALYSIS 22

ESTIMATED INCOME STATEMENT 22

ESTIMATED BALANCE SHEET 23

ESTIMATED CASH FLOW STATEMENT 24

FINANCIALS 25

ICE CREAM FACTORY


ECONOMIC ANALYSIS 26

ECONOMIC RATE OF RETURN 26

ANNEXURES 27

COST OF LAND 27

COST OF CIVIL WORK 27

COST OF MACHINERY LOCAL 28

COST OF MACHINERY IMPORTED 28

ESTIMATED COST OF PROJECT 29

INITIAL WORKING CAPITAL 29

ANNUAL PRODUCTION 30

DETAILS OF PRODUCTION SALES AND SALES REVENUE 31

BREAKEVEN 33

WACC 33

BIBLIOGRAPHY 34

ICE CREAM FACTORY


LETTER OF ACKNOWLEDGEMENT

It is a matter of great satisfaction that all our efforts ended with this thorough report based on

PROJECT APPRAISAL. Here, we would like to state that firstly, it was a blessing of The

Almighty Allah that we completed this report without any barriers and shortcomings in between.

Secondly, this report came to a successful end due to the joint efforts and cooperation of all

group members who worked hard to make it better,

Last but not the least, we would to thank Sir Mohammad Ali Sheikh whose guidance and

teaching backed us all the way while preparing this report. His teachings are something, which

we will always carry with us ahead and make the most use of it wherever possible.

Regards,

Sidra Ahmed

Mohammad Ahsan

Amit

Ramzan

ICE CREAM FACTORY


MANAGEMENT The proposed project is being installed by mutual co-operation and the work will be managed by

hard working management team. Below mentioned are the names along with the designations

who will be responsible for managing the entire project in an appropriate and effective manner.

Partners Name Designation

i. Mohammad Ahsan General Manager

ii. Sidra Ahmed Deputy Manager

iii. Amit Deputy Manager

iv. Ramzan Deputy Manager

SPONSORS The sponsors of the project are highly qualified and are well experienced in the business field.

Besides this, they have good business reputation in the industry.

Sponsors are capable enough to help in this project in order to make it possible and viable too.

Sponsor’s names are mentioned below:

i. Mohammad Ahsan

ii. Sidra Ahmed

iii. Amit

iv. Ramzan

ICE CREAM FACTORY


MARKET APPRAISAL

OVERVIEW OF LOCAL INDUSTRY Looking at the local industry of ice cream that is a part of food & beverages industry, Pakistan has the

market share of ice cream of around PRs8bn.

There are lots of ice cream manufacturers in Pakistan, major raw materials for ice cream are butter, milk

and sugar, Pakistan is agricultural country so all the raw materials are easily available for it. If we deeply

look at the raw materials side, consumption of milk and sugar is now becoming a problem for Pakistan.

Pakistan is rated 4th largest milk producer country. 33bn of milk is produced annually in Pakistan. There

are around 8 million farming households in Pakistan. Thus, our proposed project will be beneficial as it is

being setup in the country that is rated among top most milk producing countries. Due to the rise in the

prices of milk and sugar, industries of Pakistan are no doubt facing a lot of problems. Punjab is one of the

major milk-producing province in Pakistan, thus we have planned to purchase milk from Punjab. Around

20 million of milk was produced in Punjab in the year 2002 and this has been increase further. Below

mentioned chart depicts that how much each region produces milk.

From the above graph, we can conclude that Punjab is one of the province that produces milk in an

abundance amount. Thus, purchasing milk from Punjab is a suitable decision for us.

ICE CREAM FACTORY


Historically POLKA is the oldest and largest company in this industry their aim was to make their

product available everywhere in the Country, Walls took over polka and continued with this

differentiation of availability. Now there are number of producers’ e.g.; Omore, Hicco, Rocco, Gourmet

and yummy, they have significant market share as well.

In local market, an ice cream generally comprises of the below mentioned items:

PRODUCT QUANTITY

Sugar 12%-15%

Milk Solids 9%-11%

Gelatin or other stabilizers 0.25%-0.5%

Solid content 30%-40%

Fat 10%

SNF 10%

The composition of milk and an isolated ice cream is given below:

INGREDIENTS MILK ICE CREAM ISOLATED ICE CREAM

Protein % 4.0 7.0

Fat % 12.0 12.0

Carbohydrate 20.0 28.0

Calories/100kg 204 208

Source: Economic Review

ICE CREAM FACTORY


MARKET SIZE Pakistan has the market size of ice cream of around 70mn liters of the branded ice cream and if we look at

the unbranded sector then the size can be doubled. Unilever, one of the giant ice cream producers

witnessed an increase in volume growth of 15%;

DEMAND FOR ICE CREAM Ice cream is the easily available product in the market but when we analyze its growth in the current

market, we can see the upward trend which shows that there is a place in the market for expansion of

existing companies and entrance of new companies.

Year Total demand(millions)

2010 172

2011 219

2012 267

2013 271

2014 275

2015 280

Constant factors:

This prediction is based on following assumptions;

Population is growing at 1.6% per year (world bank report)

Per person consumption is 1 liter per person and will be at 1.5liters per person in 2013 (according

to research report on ice cream culture in Pakistan)

DEMAND AND SUPPLY GAP Production of ice cream usually depends on the need / demand of the particular product. In Karachi,

whether it is summer or winter, the demand rate of ice cream is constant. On the other side, the demand of

ice cream in Punjab province varies. Looking at the production side, the production of igloo ice cream is

around 2400liters/hour and the capacity utilization is around 78% on the single shift basis.

Below mentioned is the production capacity of Punjab and Sind per annum.

ICE CREAM FACTORY


PRODUCTION CAPACITY OF ICE CREAM (PER ANNUM)

MILLION LITERS

PUNJAB

Walls 10.0

YUMMY, LAHORE 1.2

MARILA, ISLAMABAD 2.4

BONNIS, LAHORE 1.8

PIXIE, LAHORE 0.7

HICO, LAHORE 0.2

HOTELS & RESTURAUNT 1.0

UNORGANIZED SECTOR 3.2

TOTAL 20.5

SINDH

Walls 13.0

IGLOO, KARACHI 4.0

KHAN FOOD INDUSTRIES, SUKKUR 4.5

HOTELS & RESTURAUNT 1.5

UNORGANIZED SECTORS IN SIND 4.0

ICE CREAM FACTORY


Current demand for ice cream is around 170 million liters while its production from documented

sector is around 60 million liters that means there is a huge market available though their need is

satisfied by small producers but with good brand awareness this market can be captured.

MARKET SEGMENT As our population is divided into rural and urban areas so their choices are different with respect to their

areas.

RURAL AREAS:

They are the people living in villages, mostly they are farmers by occupation, and their choice for ice

cream is very different they want thick and very creamy ice creams; they mostly prefer KULFA, so to

cater that market you have to come up with these types of products. However, one problem with them is

that they are not brand conscious and mostly unbranded producers satisfy them.

URBAN AREAS:

Currently they are real market for ice cream manufacturers, they are brand conscious and they prefer

specific company’s ice cream, their choices are Choc Bar, Cons, and others.

All the classes (lower, middle and upper) are customers for ice cream as they have different range in ice

cream prices, starts from 5 rupees to 50 rupees for one person.

ICE CREAM FACTORY


TECHNICAL APPRAISAL

MANUFACTURING PROCESSES

Ice-cream is readily and easily available in a variety of forms such as chocolate-dipped bars and in

sandwiches form too. Ice cream is part of food that is loved by everyone. The manufacturing process of

ice cream comprises of ten steps that includes:

i. Raw materials delivery & storage

ii. Blending the mixture

iii. Pasteurizing

iv. Homogenizing

v. Cooling

vi. Adding flavors

vii. Continuous freezing

viii. Adding extra fruits and chunks

ix. Packaging

x. Hardening

RAW MATERIALS DELIVERY & STORAGE

The first step is to arrange for the raw materials and store them at the suitable and perfect

environment in order to protect them from any danger.

BLENDING THE MIXTURE

The milk will arrives at the ice cream factory in the refrigerated tanker trucks from the local dairy

farms. The milk will be then pumped into 5,000 gal (18,925 1) storage silos that will be kept at the

temperature of around 36°F (2°C). Pipes will be used in order to bring the milk in the pre-measured

amounts to around 1,000 gal (3,7851) stainless steel blenders. Premeasured and quantified amounts of

eggs, sugar, and other additions are then further blended with the addition of milk for around eight to

ten minutes.

ICE CREAM FACTORY


PASTEURIZING

Pasteurizing is a process which will be done in order to kill the bacteria. The mixture, which will be

blended, will be then piped to the pasteurization machine, which is made up of a thin stainless steel plates.

Hot water of around 182°F (83°C) flows on the one side of the plates. On the other side, the cold milk

mixture will be piped from the other side. The water will warm the mixture to the temperature of around

180°F (82°C), this process will thus helps in killing bacteria.

HOMOGENIZING

With the input of an intensive air pressure, sometimes as much as 2,000 pounds per square inch (141 kg

per sq cm), the hot mixture will be forced with the help of a small opening into the homogenizer. This

will eventually, breaks down the fat particles and will prevent them from separating from the rest of the

mixture. Homogenizer is one of the high-pressure piston pumps; therefore the mixture is further blended

as it is drawn into the pump cylinder on the down stroke and then forced back out on the upstroke.

ICE CREAM FACTORY


COOLING

The mixture after the process of homogenizing will be then piped back to the pasteurizer where the cold

water at approximately 34°F (1°C), will flows on one side of the plates and at the same time, the mixture

passes on the opposite side. In this manner, the mixture is thus cooled to 36°F (2° C). Then the mixture is

pumped to 5,000 gal (18,925 1) tanks in a room set at 36°F (2°C), where it sits for around four to eight

hours to allow the ingredients to blend.

ADDING FLAVORS

The ice cream is then pumped to a stainless steel vats, each stainless steel vats will be holding up to 300

gal (1,136 1) of mixture. Flavorings are then piped into the vats and will be blended thoroughly

CONTINUOUS FREEZING

Now the mixture will be frozen. It is pumped into the continuous freezers that can freeze up to 700 gal

(2,650 1) per hour. The temperature inside the freezers is kept at -40°F (-40°C), liquid ammonia will be

using as a freezing agent. While the ice cream is in the freezer, air is injected into it. When the mixture

leaves the freezer, it has the consistency of soft-serve ice cream.

Source: http://www.madehow.com/Volume-3/Ice-Cream.html

ICE CREAM FACTORY


ADDING FRUITS AND CHUNKS

If chunks of food such as strawberry or cookie pieces are to be added to the ice cream, the frozen mixture

is pumped to a fruit feeder. The chunks are loaded into a hopper at the top of the feeder. Another, smaller

hopper, fitted with a star wheel, is located on the front of the feeder. An auger on the bottom of the

machine turns the hoppers so that the chunks drop onto the star wheel in pre-measured amounts. As the

mixture passes through the feeder, the star wheel pushes the food chunks into the ice cream. The mixture

then moves to a blender where the chunks are evenly distributed.

PACKAGING

Automatic filling machines drop preprinted pint or half-gallon-sized cardboard cartons into holders. The

cartons are then filled with premeasured amounts of ice cream at the rate of 70-90 cartons per hour. The

machine then places a lid on each carton and pushes it onto a conveyer belt. The cartons move along the

conveyer belt where they pass under an ink jet that spray-paints an expiration date and production code

onto each carton. After the imprinting, the cartons move through the bundler, a heat tunnel that covers

each cup with plastic shrink wrapping.

HARDENING

9 Before storage and shipping, the ice cream must be hardened to a temperature of -10°F (-23°C). The

conveyer system moves the ice cream cartons to a tunnel set at -30°F (-34°C). Constantly turning ceiling

fans create a wind chill of -60°F (-5 1°C). The cartons move slowly back and forth through the tunnel for

two to three hours until the contents are rock solid. The cartons are then stored in refrigerated warehouses

until they are shipped to retail outlets.

ICE CREAM FACTORY


RAW MATERIALS USED Raw materials required to manufacture ice cream varies from ice cream to ice cream, main ingredients

like milk, butter, sugar remains there but other ingredients are also mixed to make different types of ice

creams, following mentioned are some ingredients to produce ice cream;

Milk:

Milk is the main ingredient in production of ice cream and fluctuation in its price and availability directly

affects Ice cream’s price and production, Pakistan is the 4th largest milk producing country in the world,

Pakistan produces 33million liters of milk annually. Pakistan is not only exporting milk but its products

too. Pakistan has 50 million animals that is huge quantity but most of the farmers don’t want to connect

with the formal markets and this is the reason they don’t play significantly in economic growth of the

country.

Butter:

This is also related to milk, butter can be formed after processing of milk, and its consumption in ice

cream depends upon the type of ice cream if it is kulfa or some other creamy ice cream than it will be

used in large quantity.

Sugar:

Sugar is used to make ice cream sweet; it is used in all types of ice cream, nowadays its increased prices

and shortage causing trouble in ice cream production, it is 2nd

most important crop in Pakistan, Pakistan

grows about 1 million hectares of sugarcane, more than all other cane producing countries except Brazil,

China, Cuba, India and Thailand.

Dry Fruits:

In some ice creams like “KULFA” dry fruits are used including almond, pista, this is also very famous in

rural areas of the country.

Flavor:

Food flavors are used in this all the flavors are easily available in the market and there is no hurdle to get

those flavors.

ICE CREAM FACTORY


Fruit Pulps:

As ice creams are in different flavors and sometimes they are in flavor of different fruits, for this they

need pulp of that fruit too. E.g. to produce mango ice cream, mango pulp is required.

Cones:

For ice cream cone there is a need of cone with the ice cream, three main dry ingredients compose all

types of cones. Wheat flour, tapioca flour and sugar are chosen for baking quality, strength and sweetness

respectively.

SIZE OF THE FACTORY The size of the plant will be large as the size depends on the manufacturing process; therefore, a large size

unit will be more economical than a small size plant.

ICE CREAM FACTORY


EQUIPMENTS The machineries / equipments used in manufacturing of ice cream are listed below.

Mixing units

Storage units

Homogenizer

Extrusion ice cream machines

Moulding ice cream machines

Filling ice cream machine

Hardening ice cream machines

Ice cream packaging machines

Hardening ice cream machines

Ice cream freezing machines

Choko bar hardner

Chocolate pot

Ice cream churner

Ice cream ageing machine

Brine tank

Surface cooler

Filling and Packaging line

We will use these machines in order to manufacture ice creams. The further details of the machinery are

given below:

ICE CREAM FACTORY


MIXING UNITS

Mixing units are used in order to blend the mixtures and to soften them.

STORING UNITS

Storing units are further used to store the ice cream in order to protect it from any externalities.

ICE CREAM FACTORY


FREEZING UNITS

LAYOUT OF THE FACTORY The plant will be constructed according to the decided Line Layout as minimum time will be taken in

order to handle the equipment, raw materials and the finished goods i.e. ice cream.

I. LAND

The Ice cream factory will be spread over land of 500 Marlas, which is situated in one of the vast milk

production region of Pakistan i.e. Punjab at Sheikhupura Road near Highway. We have selected this

region due to the milk production as milk is the major raw material that is used in manufacturing ice

cream. In order to save our transportation cost, we have selected Punjab. The Factory is near from the

highway which will help us in delivering our finished goods to the other areas.

II. RAW MATERIAL

The basic raw material i.e. milk is available in abundance in the area. Punjab is known as one of the

largest milk producing area and is top among the other provinces. However, the milk prices are increasing

day by day. The current milk price is Rs 50/lit which will further grow.

III. LABOR

Due to one of the main reason that is unemployment in the country, there are many unskilled labors that

are readily available in the region. On the other side, we will hire skilled labor too.

ICE CREAM FACTORY


IV. UTILITIES

For the manufacturing / production of ice cream, a large amount of water as well as energy is required.

Due to the shortage of electricity, some problems may arise. But negotiations and agreements are under

consideration with LESCO in order to reduce any problems in future. Further, precautionary measures

will be taken by the company as well in order not to over use the electricity.

V. TRANSPORT FACILITY

Transportation facilities will be used in order to bring the milk, sugar and other raw materials to the mill.

On the other side, in house transportation facility will also be used in order to carry the material from one

hardener machine to the store rooms.

ICE CREAM FACTORY


FINANCIAL ANALYSIS

ESTIMATED INCOME STATEMENT

Rs in (000)

2012 2013 2014

Sales 1381500 1540541 1545096

COST OF SALES raw material 572140 607900 607900

labor 37195 40034 42872

manufacturing overhead 209106 212846 216961

depreciation 8315 8315 8315

Total cost of manufacturing 826756 869095 876048

less: inventory adjustments 41338 2117 348

Cost of sales 785418 866978 875700

Gross profit 596082 673563 669396

OPERATING EXPENSES general & administrative expenses 3876 4264 4690

selling expenses 27630 30811 30902

Total operating expenses 31506 35074 35592

operating profit 564576 638489 633804

OTHER EXPENSES financial charges on loan 37534 35774 33731

bank borrowings 0 0 0

Amortization of preproduction expenses 333 333 334

total other expenses 37867 36107 34065

profit before tax 526709 602383 599739

tax provision 0 0 0

net profit 526709 602383 599739

ICE CREAM FACTORY


ESTIMATED BALANCE SHEET

2011 2012 2013 2014

ASSETS CURRENT ASSETS cash & bank balances 3103 488276 1017294 1521504

short term investments 0 0 0 0

accounts receivables 0 27630 30811 30902

inventories Raw material 47025 28607 30395 30395

Finished Goods 0 40922 43039 43387

Stores & Spares 200 220 242 266

Advances Deposits & Prepayments 300 330 363 399

Total current assets 50628 585985 1122144 1626853 FIXED ASSETS

fixed assets at cost 339351 339351 339351 339351

less: accumulated depreciation 0 -8315 -16630 -24944

fixed assets net 339351 331036 322721 314407

intangibles 1000 667 334 0

total fixed assets 340351 331703 323055 314407

TOTAL ASSETS 390979 917688 1445199 1941260

LIABILITIES & EQUITY CURRENT LIABILITY bank borrowings 0 0 0 0

tax payable 0 0 0 0

dividend payable 0 0 25023 32842

current maturity of long term debt 0 48536 48536 48536

loans Total current liability 0 48536 73559 81378

LONG TERM DEBTS long term loans 234587 186051 137514 88978

Total long term debt 234587 186051 137514 88978

EQUITY paid up capital 156392 156392 156392 156392

retained earnings 0 500374 1047615 1584524

total equity 156392 656766 1204007 1740916

total liability & equity 390979 891353 1415080 1911272

ICE CREAM FACTORY


ESTIMATED CASH FLOW STATEMENT

2011 2012 2013 2014

SOURCES OF FUNDS 0 564576 638489 633804

operating profit 0 8315 8315 8315

Add: back depreciation 0 572891 646804 642119

Total fund from operation OTHER SOURCES

0 0 0

loans 234587 0 0 0

terms finance certificates 0 0 0 0

bank borrowings 0 0 0 0

paid up capital 156392 0 0 0

Total sources of funds 390979 572891 646804 642119

APPLICATION OF FUNDS investment in fixed assets 311823 0 0 0

financial charges during construction 27528 0 0 0

pre-production expenses 1000 0 0 0

repayment of NBP loans 0 0 48536 48536

term finance certificates 0 0 0 0


Financial charges long term debts 0 37534 35774 33731


PAYMENT OF taxes 0

dividends 0 0 0 25023

short term investments 0 0 0 0 increase in current assets (other than cash) 47525 50184 7141 499

Total application of funds 387876 87718 91451 107790

cash supplies 3103 485173 529018 504210

cash at beginning of year 0 3103 488276 1017294

cash at end of the year 3103 488276 1017294 1521504

ICE CREAM FACTORY


FINANCIALS Total cost of project 380198.398

DEBT financing 228119

EQUITY 152079

Annual production 24864 liters

Sales 1381500

NI 526709

WACC 12.64%

NPV 646044

IRR 64%

BREAK EVEN 24.15%

ICE CREAM FACTORY


ECONOMIC ANALYSIS

ECONOMIC RATE OF RETURN

Since our project totally based on domestic resource, ad its raw material also, we get from domestic resources , so there is not as such different In economic and financial rate of return, but removing tariff from imported machinery, TAXES and considering ($1=86.5) AS shadow exchange rate, EIRR( economic internal financial rate of return comes out 57%.

ECONOMIC COST OF PROJECT -339160

YEAR CAPITAL OUTLAY CASH FLOWS

0 -339160

1 522707

2 639663

3 641620

4 642119

5 642119

6 629619

7 431379

8 431379

9 431379

10 431379

11 422804

12 433930

13 433999

14 433999

ECONOMIC RATE OF RETURN 57%

ICE CREAM FACTORY


ANNEXURES

COST OF LAND

Rs in (000)

S.NO DESCRIPTION AREAS IN MARLAS

UNIT COST

TOTAL COST

1 purchase of land 500 350 175000

2 site preparation

60

3 registration fees

50

4 stamp duty

5

5 district council fees

20

6 transfer charges

100

TOTAL COST OF LAND

175235

COST OF CIVIL WORK

(Rs in 000)

SNO DESCRIPTION

TYPE OF BUILDING

AREAS COVERED

UNIT OF CONSTRUCTION

UNIT COST

TOTAL COST

1 office building RCC 170 Sft 119.83 20371

2 Production building RCC 170 Sft 119.83 20371

3 store for raw material RCC 8 Sft 119.83 959

4 store for finished goods RCC 120 Sft 119.83 14380

5 cafeteria RCC 5 Sft 100 500

6 Boundary walls Brick work 19.64 Sft 57.26 1125

7 security room / hut Brick work 1 Sft 93.15 93.15

TOTAL COST OF CIVIL WORK

57798

ICE CREAM FACTORY


COST OF MACHINERY LOCAL

Rs (000)

SNO DESCRIPTION QUANTITY

UNIT COST

TOTAL COST

1 heat exchangers 1 150 150

2 Homogenizers 1 150 150

3 cooling pipes 1 100 100

4 chiller 1 170 170

TOTAL COST OF LOCAL MACHINERY

570

COST OF MACHINERY IMPORTED

Rs (000)

SNO DESCRIPTION

UNIT COST QUANTITY

EXCHANGE RATE TOTAL COST

1 GMF (cup filler, Role 20) 374770 1 86 32230.22

2 Techno ice 140539 1 86 12086.354

3 Sedum 1874 1 86 161.164

4 Gram equipment 468 1 86 40.248

5 3M-Matric 2342 1 86 201.412

TOTAL COST OF IMPORTED MACHINERY

86 44719.398

ICE CREAM FACTORY


ESTIMATED COST OF PROJECT

(Rs in (000)

SNO DESCRIPTION TOTAL COST

1 land 175235

2 building 57798

3 machinery local 570

4 machinery imported 44719.398

5 inland charges 20

6 erection & installation charges 200

7 contingencies 5000

8 furniture & fixture 5000

9 vehicles 12500

10 reproduction expenses 1000

11 interest during construction 27528

TOTAL FIXED COST 329570.398

INITIAL WORKING CAPITAL 50628

TOTAL COST OF PROJECT 380198.398

INITIAL WORKING CAPITAL

Rs in (000)

CURRENT ASSETS AMOUNTS

Inventories raw material 47025

finished goods 40922

store & spares 200

Total cost of inventory 88147

advances & deposits 300

accounts receivables (2% of sales) 27630

cash 661

TOTAL CURRENT ASSETS 116738

Possible current liabilities Less: bank borrowing 75% of inventories 66110

NET INITIAL WORKING CAPITAL REQUIREMENT 50628

ICE CREAM FACTORY


ANNUAL PRODUCTION

ANNUAL PRODUCTION OF PRODUCTS

ANNUAL PRODUCTION (IN Ltrs)

Annual production of kulfa (2 ltr) 504

Annual production of kulfa (1 ltr) 1,008

Annual production of kulfa cup (1 ltr) 10,080

Annual production of mango (2 ltr) 504

Annual production of mango (1 ltr) 1,008

Annual production of mango cup (1 ltr) 10,080

Annual production of vanila stick 840

Annual production of choc bar (1 ltr) 840

1) the above capacity is based on 365 working days per annum at 100% capacity and project would start operation on 12,2012 2) operation efficiency of project assumed that 80% in first year of the operation and 85% in 2nd year

3) year end inventory is assumed that 5% of production of that particular year 4) we assumed to sell 100% of our production in local market selling prices assumed in accordance with the prevailing rates in the market

ICE CREAM FACTORY


DETAILS OF PRODUCTION SALES AND SALES REVENUE

a)

2012 2013 2014

production of sulfa (2 ltr) 403200 428400 428400

add: opening inventory 0 20160 21400

Total available for sale 403200 4485600 449800

less ending inventory -20160 -21400 -21400

Quantity sold 383040 427160 428400

b)

2012 2013 2014

production of kulfa (1 ltr) 806400 856800 856800




Quantity sold 766100 854260 856800

c)

2012 2013 2014

production of kulfa cup (1 ltr) 8064000 8568000 8568000




Quantity sold 7660800 8542800 8568000

d)

2012 2013 2014

production of mango (2 ltr) 403200 428400 428400




Quantity sold 383040 427160 428400

e)

2012 2013 2014

production of mango (1 ltr) 806400 856800 856800




Quantity sold 766100 854260 856800

ICE CREAM FACTORY


f)

2012 2013 2014

production of mango cup (1 ltr) 8064000 8568000 8568000




Quantity sold 7660800 8542800 8568000

g)

2012 2013 2014

production of vanilla stick 672000 714000 714000




Quantity sold 638400 711900 714000

h)

2012 2013 2014

production of choc bar (1 ltr) 672000 714000 714000




Quantity sold 638400 711900 714000

SALES REVENUE

LOCAL SALE 2012 2013 2014

1 kulfa (2 ltr) @ 250 95760 106779 107100

2 kulfa (1 ltr) @ 130 99593 111053 111384

3 kulfa cup (1 ltr ) @ 20 153216 170856 171360

4 Mango (2 ltr) @ 250 153216 170856 171360

5 Mango (1 ltr) @ 130 153216 170856 171360

6 Mango cup (1 ltr) @ 20 153216 170856 171360

7 Vanila stick @ 7 153216 170856 171360

8 Choc bar @ 12 153216 170856 171360

ANNUAL SALES 1114649 1242968 1246644

ICE CREAM FACTORY


BREAKEVEN

Rs in (000)

DESCRIPTION VARIABLE COST

FIXED COST

TOTAL COST

raw material 572140 0 572140

labor 37194 0 37195.2

manufacturing overheads 37406 171700 209106

depreciation 0 8315 8315

administration & general expenses 0 3876 3876

selling expenses 28 0 28

interest 0 37534 37534 amortization of preproduction expenses 0 333 333

TOTAL 646769 221757 868526

sales value of production 1114649

Breakeven point [221757 / 1114649 - 646769]

0.47

WACC

Rs in (000)

NATURE OF FUND AMOUNT

INTEREST RATE

AFTER TAX RATE

TOTAL INTEREST

NBP loan 324587 16% 10.40% 24397

paid up capital 156392 16% 16% 25023

Total 390979 Weighted average cost of fund

WEIGHT * AFTER TAX RATE weighted average cost of fund (debt) 60% * 10.40% 6.24%

weighted average cost of fund (equity) 40% * 16% 6.40%

TOTAL

12.64%

ICE CREAM FACTORY


BIBLIOGRAPHY

I. "Ice cream industry in Pakistan". Economic Review. FindArticles.com. 29 Nov, 2010.

http://findarticles.com/p/articles/mi_hb092/is_n1_v29/ai_n28702661/

II. http://www.companiesandmarkets.com/Market-Report/ice-cream-market-in-pakistan-

to-2014-458142.asp

III. http://www.reportlinker.com/ci02024/Food.html/coverage/Asia:Pakistan/mode/premi

um/publisher/Datamonitor

IV. http://www.highbeam.com/doc/1G1-20457473.html



http://www.companiesandmarkets.com/Market-Report/ice-cream-market-in-pakistan-to-2014-458142.asp

http://www.companiesandmarkets.com/Market-Report/ice-cream-market-in-pakistan-to-2014-458142.asp

http://www.reportlinker.com/ci02024/Food.html/coverage/Asia:Pakistan/mode/premium/publisher/Datamonitor

http://www.reportlinker.com/ci02024/Food.html/coverage/Asia:Pakistan/mode/premium/publisher/Datamonitor

http://www.highbeam.com/doc/1G1-20457473.html

ICE CREAM FACTORY


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